"We also urge the people to avoid religious extremes and violence which could jeopardise the country's democratic reform and development,'' it said.

The mobs destroyed mosques and burned dozens of homes over the weekend despite attempts by the government to stem the nation's latest outbreak of sectarian violence.

President Thein Sein had declared an emergency in the affected areas of central Myanmar on Friday and deployed army troops to the worst-hit city, Meikhtila, where at least 32 people were killed.

According to the UN, more than 12,000 people were displaced.

Monday's announcement said the displaced people would be resettled as soon as calm was restored.

Muslims in Meikhtila, who make up about 30 percent of the city's 100,000 inhabitants, appeared to have borne the brunt of the devastation.

At least five mosques were set ablaze from Wednesday to Friday, and most homes and shops burned were Muslim-owned.

The authorities said they detained at least 35 people allegedly involved in arson and violence.

But residents and activists said the police did little to stop the rioters or reacted too slowly, after a dispute on Wednesday in Meikhtila between a Muslim gold shop owner and his Buddhist customers brought anti-Muslim mobs into the streets.

Sectarian unrest

The upsurge in sectarian unrest casts a shadow over Thein Sein's administration as it struggles to make democratic changes after half a century of army rule officially ended two years ago this month.

Similar violence that rocked western Rakhine state last year, pitting ethnic Rakhine Buddhists against Rohingya Muslims, killed hundreds and drove 100,000 from their homes.

"[The latest bloodshed] shows that inter-communal tensions in Myanmar are not just limited to the Rakhine and Rohingya in northern Rakhine state"

- Jim Della-Giacoma, ICG

The emergence of sectarian conflict beyond Rakhine state was an ominous development, one that indicates anti-Muslim sentiment has intensified nationwide since last year and, if left unchecked, could spread.

Muslims account for about four percent of the nation's roughly 60 million people, and during the long era of authoritarian rule, military governments twice drove out hundreds of thousands of Rohingya, while smaller clashes occurred elsewhere.

About one third of the nation's population consists of ethnic minority groups, and most have waged wars against the government for autonomy.

The latest bloodshed "shows that inter-communal tensions in Myanmar are not just limited to the Rakhine and Rohingya in northern Rakhine state,'' Jim Della-Giacoma from the International Crisis Group (ICG), said

"Myanmar is a country with dozens of localised fault lines and grievances that were papered over during the authoritarian years that we are just beginning to see and understand. It is a paradox of transitions that greater freedom does allow these local conflicts to resurface.''